Economics Card 1

Front 1

What are scarce resources/ factors of production ?

Back 1

Land- line natural resources
Labor- all human resources
Capital - all man-made aids to production
🔹Euntrepreneurship - the ability to perceive a want and to see how resources can be used to fulfill that want

Hint 1

There are 4

Front 2

What are ulimited wants?

Back 2

1. Goods
2. Services

Hint 2

There are 2

Front 3

What do we have to determine about or unlimited wants?

Back 3

If they are necessities or luxuries, which depends on when (era) and where (location)

Hint 3

2 things

Front 4

What choice do we have to make?

Back 4

(always constant)
Can't give to someone without taking from another

Hint 4

Nothing in life is free...

Front 5

What is opportunity cost?

Back 5

- the most desired good, service, activity that is for gone by choosing one alternative instead of another
*The forgone opportunity of the next best alternative

Hint 5

It is based on choices

Front 6

What is the production possibilities curve?

Back 6

It shows the alternative combinations of goods and services that could be produced with all available resources and technology.

-show that given our resources that different combinations that are possible

Hint 6

Given our resources, what is possible?

Front 7

What is the law of increasing opportunity cost?

Back 7

When more time, effort, resources are devoted to one activity,
The cost in terms of the other activity or activities sacrifice becomes greater and greater

Hint 7

Greater and greater

Front 8

Why does the sacrifice become greater and greater (Law of increasing opportunity cost)?

Back 8

The reason is because the specialization of inputs
↪Specialization of one good or service comes at the cost of producing another

Hint 8

Front 9

How does the production possibilities curve effect/ show opportunity cost?

Back 9

The reallocation of resources to one good come at the cost of sacrificing resources to another service.

Hint 9

One for the other

Front 10

How does the production possibility curve show specialization of resources?

Back 10

High production of one good comes at the cost of low production of another

Front 11

How does the production possibilities curve show the increasing opportunity cost?

Back 11

As you produce more and more of one good the sacrifices of producing another becomes greater and greater

Front 12

How can the production possibility curve increase?

Back 12

- by growth; increasing standards of living
- so we must be able to increase our resources and technology

Hint 12

2 must increase

Front 13

What does it mean to produce on the curve, inside, and outside the curve?

Back 13

➖ inside: under utilizing resources.
✅ on the curve: fully utilizing resources.
➕ ouside: over utilizing resources.

Front 14

What did Adam Smith write in his book?

Back 14

That people who are guided by their own self interest tend to promote the greater good as well

Front 15

What are the 3 alternatives for how people act?

Back 15

1. Rely on self-interest
2. Enforce or coerced by the government
3. Rely on their benevolence

Front 16

What is harmony of interests?

Back 16

Capitalists/ entreprenuers have to voluntarily "hook us up" based on their self interest.
- Responding to what customers want.

Hint 16

Everybody's happy

Front 17

What is the definition of efficient (re)allocation of resources?

Back 17

- Prices reflect what you need
- relying on people to be frugal, mindful, get what they need. Which is guaranteed if you rely on their self interest.

Front 18

What is the invisible hand?

Back 18

-Guides market assistance in the market economy.
👉⭐ prices are the reason we don't rely on a central authority, it needs to reflect reality and it tells the story of scarcity and demand. 👈
-giant billboard sign that is a market signal to businesses.

Front 19

What is Laissez-faire?

Back 19

The government needs to leave (the market) alone, don't distort (the market).

Front 20

What is price determination?

Back 20

Equal price and quantity demand/supply are determined by the interaction between the supply curve and demand curve.

Hint 20

2 curves

Front 21

Demand schedule?

Back 21

- explained by the law of demand.
-A Change in the price changes the quantity demand of the product per week.
⭐ it reflects the market at the time; the determinants of the demand.

Hint 21

Front 22

What is the law of demand?

Back 22

- As the prices of a good decrease⬇, the quantity demanded increases ⬆.

- As the price of a good increases⬆, the quantity demanded decreases⬇.

Hint 22

⬇, ⬆.
⬆, ⬇.

Front 23

What are the determinants of demands?

Back 23

1. Income of consumers
2. Tastes of consumers (what they want)
3. Prices of related goods
>substitute ($tea 🔼, Dcoffee 🔼)
>compliment ($hotdog🔽,Dbuns🔼)
4. Price expectations of consumers
(expect $⬆= D⬇, and the opposite)
5. Number of consumers

Hint 23

They're 5.
Must keep them ceteris paribus.

Front 24

What happens with changes in demand?

Back 24

Caused by - a change in one of the determinants of demand.
Result in - a whole new demand schedule and curve.

Hint 24

A cause and effect

Front 25

What happens with a change in quantity demanded?

Back 25

Caused by- a change in the price of a good itself.
Results in - movement from one point to another point on the same demand curve.

Hint 25

A cause and effect

Front 26

Supply schedule?

Back 26

- a change in the price changes the quantity supplied per week.
- based on the law of supply
- Reflects the market at the time and the determinants of supply.

Hint 26

Front 27

What is the law of supply?

Back 27

As the price of a good decreases⬇, the quantity supplied also decreases⬇.

As the price of a good increases⬆, the quantity supplied also increases⬆.

Hint 27

⬇, ⬇. ⬆, ⬆.

Front 28

What are the determinants of supply?

Back 28

1. Cost of inputs (use it for their business).
2. Prevailing technology (anything that affects production process).
3. Number of sellers
4. Price expectations of suppliers. (in the future $🔼, S🔽)
5. Subsidies and taxes
6. Price of other goods ($corn🔽, Swheat 🔽)

Hint 28

There are 6.
Must keep them ceteris paribus.

Front 29

What happens with a change in supply?

Back 29

Caused by - change in one of the determinants of supply.
Results in - a whole new supply schedule and curve.

Hint 29

Cause and effect

Front 30

What happens with the change in quantity supplied?

Back 30

Caused by - a change in the price of the good itself.
Results in - movement from one point to another point on the same supply curve.

Hint 30

A cause and effect

Front 31

Draw a demand curve?

Back 31

Front 32

Draw a supply curve.

Back 32

Front 33

Show equilibrium price and quantity demanded/supplied.

Back 33

Front 34

Positive change in demand? The effect?

Back 34

The effect: P ⬆And Q⬆

Front 35

Negative change in demand? The effect?

Back 35

Effect: P ⬇and Q ⬇

Front 36

Positive change in supply? The effect?

Back 36

The effect : P⬇ and Q⬆

Front 37

Negative change in supply? The effect?

Back 37

The effect: P⬆ and Q⬇

Front 38

Price of a demanded compliment & substitute good changes?

Back 38

Compliment: $corn⬆, Dwheat⬆
Substitute: $ hotdogs⬇, Dbuns ⬆

Front 39

What is a price floor? Draw.

Back 39

When the government raises the price to a certain point where it cannot fall, so it hits a floor.
-benefits the suppliers
-⬆supply ⬇demand
-creates a surplus
-creates market failure

Hint 39

Front 40

What's a price ceiling? Draw.

Back 40

When the government lowers the price so much that. It cannot rise anymore, hits a ceiling.
-hooking up the consumer
-⬇supply.⬆demand.
-creates a shortage
- causes market failure

Hint 40